Banking and Finance Law Daily Wrap Up, PRUDENTIAL REGULATION—FDIC’s Hill details sweeping overhaul of supervisory and regulatory framework, (Mar 12, 2026)

By Lauren Bikoff, MLS

During his remarks, Hill teased forthcoming guidance to clarify stablecoin ineligibility for pass-through insurance.

The Federal Deposit Insurance Corporation is moving forward with a broad set of reforms aimed at reshaping how bank supervision and regulation are carried out, according to March 11 remarks from FDIC Chairman Travis Hill. Speaking at the American Bankers Association’s Washington Summit, Hill said the agency is working to make its regulatory toolkit more focused on material financial risks while supporting economic growth, innovation, and long-term stability in the banking system. Hill noted the reform effort, underway since early 2025, is intended to move FDIC oversight away from overly process-driven reviews and toward outcomes that directly impact safety and soundness.

A major component of the initiative is centered on supervision reform. The FDIC has issued new guidance directing examiners to prioritize significant financial risks and clear violations of law, rather than minor or procedural issues. Among the steps already taken are a joint proposal with the Office of the Comptroller of the Currency to define “unsafe or unsound practices” and “matters requiring attention,” a comprehensive review of existing supervisory recommendations, and progress toward interagency changes to the CAMELS rating system. “The result of these initiatives is not lenient supervision; it is supervision focused on the things that truly matter,” Hill stressed.

The reform agenda also extends to consumer compliance supervision. The FDIC has reduced the frequency of consumer compliance examinations for small banks, limited supervisory criticism to actual violations of banking laws, and eliminated the use of disparate impact analysis in fair lending reviews, Hill explained. Additional changes under consideration include risk-focused exam scoping, limits on off-cycle “visitations,” and adjustments to thresholds that trigger the most severe supervisory consequences. According to Hill, these changes are designed to make consumer compliance exams more effective and less burdensome while maintaining strong consumer protection.

In addition, Hill outlined plans to clarify the FDIC’s position on stablecoins and deposit insurance. In the coming months, the agency intends to propose a rule stating that payment stablecoins are not eligible for FDIC pass-through deposit insurance. Hill said treating stablecoin reserves as insured deposits on a pass-through basis would conflict with the prohibition on deposit insurance for stablecoins under the GENIUS Act. He argued that addressing the issue through regulation now would avoid confusion and conflicting expectations if a bank holding stablecoin reserves were to fail in the future.

Taken together, the reforms described in Hill’s remarks signal a significant shift in how the FDIC approaches supervision, regulation, and emerging financial technologies. The FDIC expects to release additional proposals in the months ahead as it continues to “modernize its regulatory framework,” Hill concluded.

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